What is impacting event marketing expenditure?
Neil Hooper, creative director at Circle Agency, noted the election could have contributed to the rise in event marketing budgets over quarter two, hence the decline in quarter three.
He told Event: "The slow down doesn’t surprise me, as this year took off at pace for everyone. The momentum in the drive up to the General Election was frantic with enquiries and opportunities. Once the election process finished, it seems to have settled and speculation has subsided, leaving a feeling of less urgency."
He added that brands are becoming more organised with their marketing efforts. "We have found brands planning much further ahead for events and experiential activations, which means that much of the work we have undertaken in the last two quarters will not be seen until early to mid next year," he said.
Neil Crespin, chairman and creative director at MCM Creative, commented that the economy is limiting brands' ability to execute their ideal events. "I've seen businesses almost desperate to do events or communications projects but struggling with reduced budgets," he said. "What they are looking for agencies to deliver is 'more for less'.
"This is a reflection of what I believe to be an ongoing concern about the economy, corporate austerity and of the level of demands for businesses to refresh their cash reserves," he explained.
Mark Evans, managing director at Kommando, similarly attributed the figures to the economy, particularly the relationship between global macroeconomics and the financial and currency markets.
"This year we have seen major jitters in global markets with the Chinese economy slowdown and other BRICs, [Brazil, Russia, India, China and South Africa] with the exception of India, suddenly in reverse growth. This has had a bearing on the drop over the quarter," he said.
"A huge number of the global event marketing investors have a 'centralised' global perspective and local marketing budgets are sensitive to the likes of currency markets, which can affect scale and event production."
Sam Gill, chief executive at Story Events, remains positive, noting that event marketing expenditure has been tracking exceptionally well, and that this can’t go on forever.
"It is a settle down, it’s not an area of concern for the industry. The report is UK wide, and I think in London that figure is higher [than the +2.6 growth reported] – obviously they don’t split that out," he said.
He added that if the industry delivers quality events, growth will continue. "Successful events will encourage marketers to increase their spend in events," said Gill.
The relationship between events and the internet
Evans believes the two sectors are linked, and predicts this relationship will continue well into the future. "Anyone with marketing acumen realises that there is no better way to promote engagement and push/pull consumer response than the physical experience amplified by the power of the internet," he explained.
"With a growing toolbox of social media innovations driving the event story and shaping advocacy and buying behavior, these two ‘best friends’ will continue to out-perform anything else for now."
Gill believes the web has played an important role in the lucrative nature of events. "I think the ROI on events has increased due to the internet, I don’t think it goes the other way – it offers the ability to extend events, particularly with social media."
Hooper agrees with Evans, noting that events and online are indeed intertwined, which could explain the growth for both sectors over Q3.
Brand experiences create stories, stories start conversations, conversations drive word of mouth and the internet is our biggest broadcast device to spread the word," he said.
"One feeds the other and if a brand wants to influence a consumer’s purchase consideration, then positive word of mouth, or put another way, conversations about their brand or product, is proven to drive sales."
What does the future hold?
Crespin noted he wouldn't be suprised if the aforementioned ‘more for less’ approach becomes the new normal. "It's making us think far more about developing strategies that are cost effective but still deliver huge return for our clients," he said.
Hooper’s outlook for marketing expenditure is positive, and he predicted continued growth in budgets in 2016. "I feel we will see continued growth and strong, positive figures in the first two quarters of next year.
"In comparison to last quarter’s results, we see that brands are changing their media strategies, and adapting to an ever-changing media landscape," he said.
Evans added: "I see a leveling out and slow down over the next two to three quarters until confidence in the global currency and financial markets levels out."